Newman Company reports the following information from the budget for the coming year:

Estimated total amount of manufacturing overhead . . . . . . . . . . . . . . . . . . . . . $1,600,000

Average wage for production employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13.50

Estimated direct labor hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000

Estimated machine hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,000

The company allocates manufacturing overhead based on direct labor hours. Compute the company’s predetermined overhead rate.